Introduction: In a recent regulatory development, the Ministry of Corporate Affairs (MCA) has imposed a significant penalty on My Wheels Private Limited. The reason behind this penalty is the absence of the Company Identification Number (CIN) on the company’s letterhead, a violation of Section 12(3)(c) of the Companies Act, 2013. In this article, we will explore the details of the case, the legal provisions involved, and the consequences for non-compliance.
Detailed Analysis:
1. Appointment of Adjudicating Officer: The MCA appointed an adjudicating officer, Mukesh Kumar Soni, under Section 454 of the Companies Act, 2013, and the Companies (Adjudication of Penalties) Rules, 2014, to oversee penalties under the Act.
2. Company Profile: My Wheels Private Limited (CIN-U50100MP2015PTC034842) is a registered company under the Companies Act, 2013, with its registered office at 6-7, Malviya Nagar, Bhopal 462001, M.P., as per information available on the MCA website.
3. Breach of Section 12(3)(c): The breach came to light during an inspection under Section 206(5) of the Companies Act, 2013. It was discovered that the company’s letterhead did not contain the Company Identification Number (CIN) as required by Section 12(3)(c) of the Companies Act. This non-compliance led to a violation of Section 12(3) of the Act, triggering the application of Section 12(8) penalties.
4. Show Cause Notice: Subsequently, the ROC office issued a show cause notice under Section 12(3)(c) of the Companies Act, 2013, to the company and its defaulting officers via letter No. ROC-G/Adj.Pen./u/s. 12(3)(c)/My Wheels/ 1684-1686 dated 28.07.2023. The notice was duly delivered, and the company’s response was received in the ROC office via post, dated 14.08.2023, with Mrs. Manju Garg representing the company.
5. Notices of Inquiry: Notices of Inquiry under Section 12(3)(c) were issued to the company and its officers in default via letter No. ROC-G/Adj. Pen. /U / s. 12(3)(c) My Wheels /2022-2024 dated 11.09.2023. The notices were delivered, and the response was received in the ROC office via post, dated 22.09.2023, once again with Mrs. Manju Garg representing the company. It’s noteworthy that the response was not on the company’s letterhead.
6. Ex Parte Order: On the scheduled date of the hearing, no representatives from the company or its directors appeared, leading to the declaration of an ex parte order. Considering the facts and circumstances, the adjudicating officer concluded that the company and its officers in default were liable for a penalty under Section 12(8) of the Act for failing to comply with the requirements of Section 12(3)(c) of the Act.
7. Penalty Imposition: Consequently, the adjudicating officer decided to impose a penalty in line with Sub-section 8 of Section 12 of the Companies Act, 2013. The penalty details are as follows:
- My Wheels Private Limited: ₹1,00,000/-
- Rishabh Garg: ₹1,00,000/-
- Pankhuri Gupta: ₹1,00,000/-
The nature of the default was non-maintaining of the registered office, falling under Section 12(8) of the Companies Act, 2013.
8. Payment Responsibility: It was emphasized that the penalties imposed should be paid from the personal sources or income of the officers in default. Furthermore, the penalty had to be remitted through the Ministry of Corporate Affairs portal, as stated under Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019, with intimation to the ROC office.
9. Additional Directives: The penalty amount was to be remitted by the company through the MCA21 portal within 60 days from the date of the order. The company was instructed to file INC-28 as per the provisions of the Act, attaching the copy of the adjudication order and payment challans.
10. Appeals and Penalties for Non-Compliance:
- Individuals aggrieved by the adjudicating authority’s order under Section (3) of Section 454 have the option to prefer an appeal to the Regional Director with jurisdiction.
- All appeals under sub-section (5) of Section 454 should be filed within 60 days of receiving the adjudicating authority’s order. They should be in the prescribed form and manner and accompanied by the prescribed fee.
- Section 454(8)(i) outlines that if a company fails to comply with the order within 90 days of receipt, it could face fines ranging from twenty-five thousand to five lakh rupees.
11. Penalties for Officers in Default:
- Officers of a company or any other person in default who fail to comply with the order within 90 days may face imprisonment of up to six months or a fine ranging from twenty-five thousand to one lakh rupees, or both.
12. Continued Action Possibility: The order does not preclude the ROC office’s right to initiate further actions, including penal actions, for related, incidental, or continuing contraventions.
13. Order Dissemination: In compliance with sub-rule 3 of the Companies (Adjudication of Penalties) Rules, 2014, a copy of the order was sent to various recipients, including M/s. My Wheels Private Limited, Sh. Rishabb Garg, and Pankhuri Gupta, among others. The order was also uploaded on the MCA website.
Conclusion: The penalty imposed by the Ministry of Corporate Affairs on My Wheels Private Limited serves as a reminder of the critical importance of adhering to statutory regulations. In this case, the absence of the Company Identification Number (CIN) on the company’s letterhead resulted in significant penalties. This underlines the significance of complying with even seemingly minor legal provisions under the Companies Act, 2013, and the potential consequences of non-compliance.
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GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
Office of The Registrar of Companies, Madhya Pradesh
Sanjay Complex, ‘A’ Block, 3rd Floor, By Speed Post
Jayendraganj, Gwalior —474009.
Email: roc.gwalior@mca.gov.in
No: ROC-G /Adj. Pen./u/s..12(3)(c)/My Wheels/2211
Dated: 1 1 OCT 2023
1. M/s. My Wheels Private Limited
2. Rishabb Garg
3. Pankhuri Gupta
4. Regional Director
5. E-Governance for uploading document.
(Mukesh Kumar Soni, ICLS)
Registrar of Companies, I/C,
Madhya Pradesh, Gwalior.
In the matter of Companies Act, 2013
And
In the matter of adjudication proceeding under sub-section (3)(c) of Section 12 of the
Companies Act, 2013.
And
In the matter of M/s. My Wheels Private Limited
(CIN-U50100MP2015PTC034842)
Date of hearing 21″ September, 2023
1. Appointment of adjudicating officer:
The Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II dated 24.03.2015 appointed undersigned as adjudicating officer in exercise of the powers conferred by Section 454 of the Companies Act, 2013 (hereinafter known as “Act” ) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudicating penalties under the provisions of this Act.
2. Company:
M/s. My Wheels Private Limited (CIN-U50100MP2015PTC034842) hereinafter known as company] is a registered company with this office under the provisions of the Companies Act, 2013 having its registered office situated at 6-7, Malviya Nagar, Bhopal 462001, M.P. as per the MCA website.
| SI. No. | Particulars | Details |
| 01. | Paid-up capital (F.Y. 2016-17) | 4,00,00,000 |
| 02. | Turnover (F.Y. 2016-17)s | 99,88,740 |
| e. Revenue from operation | 63,08,472 | |
| f. Other income | 36,80,268 | |
| 03. | Holding company | NO |
| 04. | Subsidiary company | NO |
| 05. | Whether company registered under Section 8 | NO |
| 06. | Whether company registered under any other Special Act. | NO |
3. Facts about the case:
Whereas, inspection u/ s. 206(5) of the Companies Act, 2013 conducted by the IO. During the inspection of company, it is observed from the notice for AGM and reply of company that address and CIN are not mentioned on the letterhead of the company that address and CIN are not mentioned on the letterhead of the company which is violation of Section 12(3)(c ) of the Companies Act, 2013. Therefore, it seems that the company has not complying the provisions of Section 12(3) (c ) of the Companies Act, 2013, resulting into violation of Section 12(3) read with Section of Act which attracted penal provisions of Section 12(8) of the Companies Act, 2013.
4. Subsequently, this office had issued show cause notice U/s. 12(3)(c)of the Companies Act, 2013 to the company and its officers in default vide No. ROC-G/Adj.Pen./u/ s. 12(3)(c) /My Wheels/ 1684-1686 dated 28.07.2023 and the notice as issued to company and officer in default were delivered. Further, reply was received in this office via post dated 14.08.2023 by Mrs. Manju Garg on behalf of the Company.
5. Thereafter, “Notices of Inquiry” vide No. ROC-G/Adj. Pen. /U / s. 12(3)(c) My Wheels /2022-2024 dated 11.09.2023 were issued to the company and its officers in default and the notice as issued to company and officer in default were delivered. Further, reply was received in this office via post dated 22.09.2023 by Mrs Manju Garg on behalf of the Company. However, the reply was also not written on letterhead of the Company. As per [Rule 3(3), companies (Adjudication of Penalties) Rules, 2014 and the date of hearing was fixed on 21st September, 2023 at 11.30 A.M in the office of Registrar of Companies, Madhya Pradesh, Sanjay Complex, A-Block, 3rd Floor, Jayendraganj, Gwalior.
6. Order:
However, on the date of hearing, no one appeared on behalf of the Company and Director. Hence, the order was declared Exparte. Having considered the facts and circumstances of the case and after taking into account the factors above and concluded that the company and its officers in default are liable for penalty as prescribed under Section 12(8) of the Act for default is made in complying with the requirements of Section 12(4) of the act of the company viz. My Wheels Private Limited for 737 days from (06.09.2021 date of Order directed by DGCoA to 21.09.2023 date of hearing) in terns of Section 12(1) of the Act.
7. Accordingly, I am inclined to impose a penalty as prescribed under Sub-section 8 of section 12 of the Companies Act, 2013. The details of the penalty imposed on the company and officers in default are shown in the table below:
| Nature of default | Relevant section under the Companies Act, 2013 |
Name of persons on whom penalty is imposed | No. of days of default |
Per day penalty for default (Rs.) |
Total default amount(Rs.) |
Maximum penalty(Rs.) |
Final penalty imposed(Rs.) |
| Non- maintaining the registered office. |
S. 12(8) | On
company |
737 | 1,000/- | 7,37,000/- | 1,00,000/- | 1,00,000/- |
| Rishabh Garg | 737 | 1,000/- | 7,37,000/- | 1,00,000/- | 1,00,000/- | ||
| Pankhuri Garg | 737 | 1,000/- | 7,37,000/- | 1,00,000/- | 1,00,000/- |
I am of this opinion that penalty is commensurate with the aforesaid failure committed by the notice and penalty so imposed upon the officers-in-default shall be paid from their personal sources/income. It is further directed that penalty imposed shall be paid through the Ministry of Corporate Affairs portal only as mentioned under Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019 under intimation to this office.
8. The penalty amount shall be remitted by the company through MCA21 portal within 60
days from the date of order. The company needs to file INC-28 as per the provisions of the act, attaching the copy of adjudication order along with payment challans.
9. Any person aggrieved by the order of adjudicating authority under Section (3) of Section 454 may prefer an appeal to the Regional Director having jurisdiction in the matter.
10. Every appeal under sub-section (5) of Section 454 shall be filed within 60 days from the date on which the copy or order made by the adjudicating authority is received by the aggrieved person and shall be in such form, manner and be accompanied by such fee as may be prescribed.
11. As per Section 454(8) (i) where a company fails to comply with the order made under sub-section (3) or sub-section (7) as the case may be within a period of 90 days from the date of receipt of the copy of the order, the company shall be punishable with fine which shall not be less than twenty-five thousand, but which may extend to five lakh rupees.
12. Where an officer of a company or any other person who is in default fails to comply with the order made under sub-section (3) or sub-section (7) as the case may be within a period of 90 days from the date of receipt of the order, such officer shall be punishable with imprisonment which may extend to six months or with the fine which shall not be less than twenty five thousands rupees but which may extend to one lakh or with both.
13. This order is without prejudice to the rights available to this office to initiate separate actions including but not limited to the penal actions for contraventions of related, incidental and/ or continuing offences/contraventions.
14. In terms of the provisions of sub-rule 3 of the Companies (Adjudication of Penalties) Rules, 2014 copy of the order is being sent to M/s. My Wheels Private Limited, 6, 7, Malviya Nagar, Bhopal 462001, M.P, Sh. Rishabb Garg S/o. Sh. Saurabh Garg, Director ,7/88, Area Colony, Shahpura, R.S. Nagar, Bhopal 462016, M.P. , Pankhuri Gupta D/o. Sh. Saurabh Garg, Director , 2, Anand Lok, Andrews Ganj, South Delhi 110049, Regional Director, North-Western Region, Ministry of Corporate Affairs, Ahmedabad and will also be uploaded on MCA website.
The adjudication notice stand disposed off with this order.
(Mukesh /Kumar Soni, ICLS)
Registrar of Companies,
Madhya Pradesh, Gwalior.
Order Reserved on 21.09.2023
Order Pronounced on 04.10.2023
Place: Gwalior, Madhya Pradesh.
